EXCLUSIVE: More than a third (39%) of respondents said preparing for auto-enrolment is their biggest objective over the next 12 months, up from 25% last year, according to research by Aon Hewitt.
Its Employee benefits and trends survey 2013, which questioned nearly 350 UK HR and benefits professionals, found that other objectives for the next 12 months include improving benefits design (9%) and reducing benefits complexity (7%).
The research found that almost half (45%) of respondents have started preparing for auto-enrolment but are not yet ready. Almost a quarter (24%) are ready, compared to 13% of respondents who said the same in 2012.
The research also found:
- Just 3% of respondent have not yet identified the changes they need to make to comply with auto-enrolment.
- 1% of respondents claim not to have considered the implications of auto-enrolment.
- 46% of respondents said auto-enrolment is making the operation of their defined contribution (DC) pension scheme more complicated.
- 33% of respondents have set up a new pension plan for their auto-enrolment population.
- 21% of respondents have not yet considered the implications of auto-enrolment for pension investment.
- 20% of respondents have not considered auto-enrolment’s impact on investment options for their default fund.
Debbie Falvey (pictured), consultant at Aon Hewitt, said: “Employers are clearly alive to the fact that auto-enrolment is their benefits benefits challenge at the moment.
“Preparations for auto-enrolment have moved on dramatically since our last survey, and it’s reassuring that so many employers of all sizes are planning ahead.
“However, the complexity of auto-enrolment must not be under-estimated. With almost half of survey respondents claiming that it has made their DC operations more complex, it evidently has the potential to add to the workload of those managing DC schemes.
“Employers and trustees need to ensure they have fully considered all auto-enrolment’s implications, for example, on investment, particularly for their default funds, which will see large increases in membership.
“Take-up rates for auto-enrolment are, so far, proving high; there is significant potential impact on costs for DC sponsors. Employers need to ensure they have assessed and addressed all these implications, to avoid potential nasty shocks just before their staging dates.”
Aon Hewitt will be exhibiting at Employee Benefits Live on 25 and 26 September at National Hall, Olympia.